United Technologies: 2011 revenue up in segments

[December 10, 2010]  HARTFORD, Conn. (AP) -- United Technologies Corp. said Thursday it expects 2011 revenue to fall short of Wall Street expectations, with sales up in all businesses except at jet-engine manufacturing subsidiary Pratt & Whitney.

The Hartford conglomerate said it expects to earn between $5.05 and $5.35 per share in 2011, with revenue of $56 billion to $57 billion, an increase of as much as 5.6 percent from this year.

Analysts surveyed by Thomson Reuters expect 2011 earnings of $5.30 per share and revenue of $57.07 billion.

United Technologies' shares fell almost 3 percent, or $2.28, to $75.35 in extended trading Thursday.

The manufacturer of jet engines, elevators, heating and cooling systems and other aerospace and building equipment backed its previous 2010 guidance of $4.70 per share, including 28 cents for restructuring. It projects revenue of $54 billion.

Chief Executive Louis Chenevert told analysts in New York that the 30 cent per share earnings range for 2011 is intended to address uncertainty in markets and account for changes in foreign currency valuations.

Efforts to restrain the federal deficit will drive down military spending, Chenevert said. Pratt & Whitney's military business will be down 5 percent next year, he said.

Subsidiary Sikorsky Aircraft's military business will be flat as Black Hawk helicopter production levels off, he said. However, the company sees strong international demand for the helicopter, Chenevert said.

He said the company expects an announcement in the second half of 2011 of an contract award from the U.S. government of 550 to 600 Black Hawks to be delivered between 2012 and 2017.

Analyst Matt Collins at Edward Jones said that in the short-term "investors are not going to be excited about the 2011 outlook," but prospects beyond next year are good.

Pratt & Whitney's next-generation jet engine that the company says cuts emissions and noise is "finally coming to fruition," Collins said.

Airbus announced last week it selected Pratt & Whitney's engine, giving the manufacturer a big boost.

In addition, Collins said Otis elevator, Carrier and United Technologies' aircraft businesses will benefit in the long term as China and India continue to urbanize.

Chenevert promised more reworking of the Carrier heating and ventilating business.

Chief Financial Officer Greg Hayes told analysts last summer that Carrier went through a "portfolio transformation." United Technologies had sold off businesses for $2 billion at Carrier since 2008 and expects to generate another $500 million to $1 billion from sales through early 2012, he said.

United Technologies weathered the recession by cutting costs and eliminating jobs. The restructuring helped blunt the impact of the downturn on Pratt & Whitney and aircraft-components manufacturer Hamilton Sundstrand, which are exposed to weaknesses in the airline industry.

[Associated Press; By STEPHEN SINGER]

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